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Crypto Exchange Coinbase to Offer Canadian Dollar Stablecoin
Crypto exchange Coinbase is set to introduce a Canadian dollar stablecoin on its platform following the acquisition of an official license to operate within Canada.
Introduction of QCAD on Coinbase
In a recent update on Twitter, Coinbase announced the addition of QCAD to its listing roadmap. QCAD is a CAD-pegged stablecoin that was reintroduced by Canadian fintech firm Stablecorp last year.
Similar to other popular stablecoins like Tether (USDT) and USD Coin (USDC), QCAD is backed by reserves of equal or greater value to the tokens issued, ensuring its peg is maintained.
Backing and Verification of QCAD
Stablecorp confirms that the tokens are backed by cash and cash equivalents, with monthly attestation reports validating their reserve status. The most recent report in February 2024 indicated 169,303.77 QCAD in circulation against CAD $200,903.17 in reserves.
Market Impact and Adoption Potential
While the amount of QCAD in circulation is relatively small compared to leading stablecoins like USDT and USDC, Coinbase’s decision to onboard it could have significant implications for adoption. Coinbase, being the largest crypto exchange in the U.S. and the only publicly traded firm of its kind, aims to list assets meeting its stringent standards regardless of market cap or popularity.
Stablecorp CEO Alex McDougall expressed optimism about the transparent and efficient stablecoin offering for Canadians, especially with the increased regulatory clarity from the Canadian Securities Administrators (CSA).
Compliance and Regulatory Landscape
Following the collapse of FTX and Terra in 2022, the CSA set strict guidelines for crypto trading platforms, emphasizing the need for stablecoins to have reserves of highly liquid assets with qualified custodians. Algorithmic stablecoins were explicitly excluded.
These stringent requirements led to Kraken and Coinbase delisting USDT and Wrapped Bitcoin (WBTC) and Binance exiting the Canadian market. However, Coinbase’s recent registration as a “restricted dealer” in Canada signifies its compliance with regulatory standards.
Notably, Coinbase has praised Canadian regulators for their collaborative approach towards the crypto industry, contrasting it with the regulatory challenges faced in the U.S., where the SEC is currently pursuing legal action against major exchanges.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
